Due to hard economic times, the need to settle bills usually come in handy. Thus, Shylock business is mushrooming all over in many towns and cities. For those who are unaware, shylock business is an informal business that offers you loan to an item you offer at a third of the resale value at the market at that moment (note: not the original price you bought the item with).
Other forms of lending are referred to as formal money lenders and are usually regulated. With the growth of the formal lending industry, this has led to the introduction of credit reference bureaus (CRBs) whose role is to evaluate a borrower’s creditworthiness and furnish this information to formal money lenders. Unfortunately, shylock business is not regulated by Central Bank of Kenya (CBK).
Since they are not regulated, here is a reprieve to loan borrowers if you feel you are overcharged, it is recommended that you seek the services of an advocate on how best your overcharge can be addressed and resolved.
The advantage of borrowing from a formally licensed and regulated lender such as banks and another mobile loan app such as Tala and branch is that your loan cannot be overemphasized. If in great need of money just borrow from formal money lenders, friend or relative or rather just sell your item for a good price as giving it to shylocks you will lose it at very little cash or even lose it trying to pay ridiculous interest each fortnight.
Here are some of the reasons to desist from borrowing loans from shylocks:
Shylocks, are not regulated. Thus, borrowers with a good credit score are not able to get loans at slightly lower interest rates however much you become their customer.
You risk being overcharged your loan just because of delay in honoring your payments - With high-interest rates of 30% of the loan you were offered, the obligation is that you repay within 2 weeks or just pay an interest rate which neither lowers your loan but rather keeps your item secure from being sold.
Borrowing from shylocks does not provides you with safeguards and dispute resolution mechanisms and usually result in many inconvenience to you as compared if you had sought loans from banks or mobile loans app which are regulated.